NAB Economy Watch: A more treacherous phase

24 March 2026

• Downward adjustments have been made to our global growth forecasts for 2026 and 2027.

• Revisions were made to forecasts for the Australian economy last week - revising down GDP forecasts for this year and next and lifting our inflation and unemployment rate forecasts.

• We have not made any changes to our RBA forecast and continue to expect the RBA to deliver another 25bp rate hike in May.

NAB Economics & Markets Research has today published a new cross-asset note, A More Treacherous Phase, outlining its key views and forecasts as the Middle East conflict moves into its fourth week.

NAB Chief Economist, Dr Sally Auld, warned of the impacts from a protracted conflict to growth and price structures for businesses.

“The macro-economic outlook appears to be transitioning towards a more treacherous phase, presenting downside risks to growth,” Dr Auld said.

“It is clear the duration of the conflict is the most consequential variable when thinking about the potential impact on the economy and financial markets, and recent damage to energy infrastructure raises the possibility of a longer supply shock.

“Conversations with customers indicate price rises are already starting to impact the final price structure of many goods and services.”

Dr Auld emphasised that the high degree of uncertainty and rapidly changing nature of the current geopolitical environment is influencing forecasts.

“Clearly the situation continues to evolve, and so while the forecasts presented in this note represent our modal forecast set, we should be mindful that the tails around these forecasts are fatter than would usually be the case,” Dr Auld said.

NAB Economics & Markets Research views and forecasts on global and Australian economies, foreign exchange and rates are detailed in today’s update.

To read the full report, click the link below.

NAB Economy Watch: A more treacherous phase (PDF, 1MB)

Economics & Markets Research